Lake County wins broadband battle

Article by: Steve Alexander

Star Tribune

April 19, 2013 - 9:36 PM

The drawn-out battle over broadband is coming to an end in Lake County.

Since the northern Minnesota county won the state’s largest package of federal broadband grants and loans, $66.4 million, in 2010, it’s been fighting a running battle with its competitors — cable TV company Mediacom and telephone company Frontier Communications — over whether a publicly funded network should compete with private business. But the opponents were unsuccessful at stopping the project, and about half of the 1,500-mile fiber network will be built this year.

“Our funds are committed,” said Lake County Commissioner Paul Bergman in an interview Friday. “We’ve already applied for $40 million of our loan and grant money. It would take an act of Congress to kill the project now.”

The new county broadband network is intended to bring voice, video and Internet services to rural areas where such services are scarce, as well as to some cities where cable TV and phone network services are already available.

Mediacom opposed the county from the start on the grounds that the federal government was subsidizing competition to the cable company.

“You can’t compete against the federal government,” Tom Larsen, group vice president for legal and public affairs at Mediacom Communications Corp. in New York, said in an interview Friday.

Mediacom’s original goal was to stop construction of the more than half of the Lake County network that would overlap with Mediacom’s network in places such as Silver Bay and Two Harbors, Larsen said. One of Mediacom’s claims was that local officials had overstated the number of homes that their network would serve in order to get government money.

But with construction of the Lake County network imminent, it’s no longer practical for Mediacom to try to stop part of it from being built, Larsen said. Instead, Mediacom hopes the Energy and Commerce Committee of the U.S. House of Representatives will investigate whether there were any financial irregularities in the way the Lake County network was planned and funded, he said.

Frontier also appears to have given up trying to stop the Lake County network. Its only remaining concern is whether Lake County properly installs its fiber optic cables on the telephone poles in places such as Two Harbors, Frontier spokeswoman Patricia Amendola in Fort Wayne, Ind., said in an interview.

The county’s only remaining challenge related to the broadband project is a $4.9 million, 2011 lawsuit over the way the county originally planned to obtain bonds for its roughly $3.5 million share of the nearly $70 million broadband network. The plaintiff, Orix Public Finance, alleged that it was initially asked to participate, then dropped from the project. It has asked U.S. District Court in Duluth for a summary judgment in its favor.

Kenneth Bayliss, an attorney for Lake County, said there won’t be a hearing on the summary judgment request until July.

But Bergman said that, even if the county loses the lawsuit, the rollout of the broadband network won’t be affected because the county’s share of the broadband project money was obtained elsewhere.